AG Disapproves of Lottery Contract with Camelot

HARRISBURG – The Pennsylvania Office of Attorney General (OAG) today announced its determination that the proposed Lottery contract with Camelot Global Services violates the Pennsylvania Constitution and is not statutorily authorized.

“The Office of Attorney General conducted a very thorough review of the Professional Management Agreement, the State Constitution, the State Lottery Act, the Gaming Act and applicable case authority and has determined that it cannot approve the contract to allow Camelot to operate and manage the Pennsylvania Lottery,” said Pennsylvania Attorney General Kathleen G. Kane.

The Attorney General is required under the Commonwealth Attorney’s Act to review contracts for ‘form and legality.’ In a memorandum to David Kraus, Chief Counsel for the Department of Revenue, Robert A. Mulle, Chief Deputy Attorney General and head of the OAG Legal Review Section, provided three reasons why the Professional Management Agreement (PMA) failed the ‘form and legality’ test.

First, the memo states that the Executive Branch exceeded its authority under Article II, Section 1 of the Pennsylvania Constitution by unlawfully infringing on the General Assembly’s power to make basic policy choices regarding the management and operation of the lottery.

Second, the memo states that the development of monitor-based or other electronic games, such as KENO, is not authorized by the State Lottery Act and usurps the authority granted by the General Assembly to the Pennsylvania Gaming Control Board.

Lastly, the memo points out that allowing Camelot to be indemnified for “indirect expenses,” as provided in the PMA, is an unconstitutional waiver of the doctrine of Sovereign Immunity as set forth in Article I, Section 11 of the Pennsylvania Constitution.

“It is our duty to defend and protect the Constitution of our Commonwealth and that is what our office has done by declining this contract,” Kane said.

“In the course of making this determination, I have taken the advice and counsel of the Executive Deputy Attorney General in charge of the Civil Division and the Chief Deputy Attorney General in charge of the Legal Review Section. Together, these attorneys have many years of experience reviewing Commonwealth contracts for ‘form and legality.’ It should be noted that these attorneys worked for the governor when he was Attorney General, as well as several Attorneys General before him.”

Kane continued, “Promising money to people in need based on a contract that is not legal and then blaming those entrusted to do their job correctly is both disingenuous and a perfect example of putting the cart before the horse. It is important that my office perform its role in the system of checks and balances that our government desperately needs and that our citizens deserve.”